Relative Strength

Relative Strength (RS) is a metric used in investing to compare the performance of a stock or asset against a benchmark or another asset over a specific period. It helps determine whether an asset is outperforming or underperforming relative to its comparison point. For example, if a stock’s price rises faster than the overall market, it has high relative strength. Investors use RS to identify stronger contenders in a market, suggesting a potential trend or momentum. In essence, it’s a way to gauge the asset’s strength relative to others, aiding informed investment decisions.